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State College Businesses Leave Nittany Mall for New Locations

by on January 10, 2014 7:00 AM

Location, location, location.

That's the answer for many businesses in State College, including several once located inside the Nittany Mall.

Recently, several stores have either left or are in the process of leaving the mall, including Gardners Candies, Kranich's Jewelers, Gap and Gap Kids, Aeropostale, Kitchen Collection and CVS.

Where are they going?

Nearly all have moved to stand-alone or plaza-style locations.

Kranich's Jewelers left the mall in October to open up a store on North Atherton Street.

"When we left the mall our business there was still doing well," says Charles Kranich, owner of four jewelry stores. "However we believed the mall traffic was less than it had been in previous years. It had been declining."

With a high concentration of major stores on North Atherton Street, Kranich said he felt it was more important to have a presence in that area versus the mall.

The North Atherton area has many larger stores including Best Buy, TJ Maxx and Wal-Mart creating a desirable location for other businesses.

"In our last few years at the mall we felt we were generating our own traffic more than benefiting from the traffic the mall brought to us," Kranich says. "We've been very pleased with the new store. Even though we were doing well in the mall we are doing considerably better in our North Atherton location."

Gardners Candies also viewed the North Atherton business area as a prime location. The company closed its shop in the mall on Dec. 31 and opened its North Atherton location just days later. A grand opening is planned for Feb. 1.

Gardners Candies President Sam Phillips says sales were fine at the mall and when the lease came to an end there was consideration to renew it. However, a location next to Panera Bread on North Atherton became more appealing.

"We thought that was an excellent location and we jumped at it," Phillips says.

The company considered keeping the store in the mall along with opening a new location, however, Phillips says the size of the State College market only allowed for one store.

"We liked the concept of our new store location because the concept of free standing stores seems to be doing very well," Phillips says. "We are excited about the new location. We feel the North Atherton Street corridor is the prime retail area for State College shoppers."

Two stores in the mall, Gap and Gap Kids, are set to close Friday. A Gap Factory Store is set to open Jan. 24 in the Trader Joe's Plaza on North Atherton.

"At Gap Inc., we're constantly reevaluating our real estate portfolio to ensure we have the right stores in the right places to best serve our customers," says Gap spokeswoman Andrea Hicklin.

Kitchen Collection is currently holding it's "going out of business" sale at the mall. Kelli Yeager, marketing manager for the company, says the closing is simply part of the normal lifecycle of a store.

"Any time that we exit a location it's usually that the life cycle of the location has come to its end," Yeager says. "On any given year we open stores and close stores. There's nothing really unusual about it."

Nittany Mall General Manager Lou Kanzleiter tells StateCollege.com the recent exit of businesses is not out of the ordinary for the shopping mall industry.

"Primarily, the recent closings at Nittany Mall are attributed to a natural cycle of lease expirations and renewals, which is not unique to only Nittany, but rather a common practice in our industry, particularly after the holiday season," Kanzleiter said in an e-mail.

Kanzleiter says management is working to bring new stores into the mall.

"Our leasing team is diligent in working to find the best fit for these vacancies based on the needs of our shoppers and the State College community. As we progress in our efforts, we will be sure to inform the region," he says.

The mall is a Pennsylvania Real Estate Investment Trust Property.

Hari Sridhar, an assistant professor of marketing at Penn State, says in general a shopping mall works this way: Larger, anchor department stores do not pay rent for the space they occupy as they are expected to draw in shoppers. The smaller stores lease their space at the mall and subsequently enjoy the benefits of foot traffic the anchor stores create.

Sridhar says stores leave a mall for different reasons, such as:

- Spill over traffic does not meet expectations if shoppers go to the anchor stores and then leave the mall and in turn paying rent becomes unproductive.

- Business owners feel their store is now established and can draw its own crowd at its own location.

Sridhar says it comes down to company awareness. If a business is trying to build awareness, the mall would be beneficial because customers unfamiliar with the company are now exposed to it. However, if a company increases in popularity, the business may no longer see the need to pay rent in a mall.

"Stores with high awareness say we can go and stand on our own and attract people. People who stay in the mall probably rely on spill over. They have to rely on that, it's the only way they can get people in the store," says Sridhar.

Additionally, Sridhar says opening new stores sends a positive message to corporate investors.

"Stand-alone stores convey to investors this brand is growing," he says.

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Jennifer Miller is a reporter for StateCollege.com. She has worked in journalism since 2005. She's covered news at the local, state and national level with an emphasis on crime and local government. jenn.miller@statecollege.com
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